At the beginning of the second part of the month the market situation was noticeably aggravated mainly due to an explicit downgrading of “black gold” prices in the world markets. As a result, the preferred securities of the power-generating sector have demonstrated a decrease as of results of the third week of the month. As opposed to them, the securities of non-mineral resources sectors were still in demand on the part of investors. Therefore, the Russian securities in general were in rather high demand and there were chances for their prompt compensation and further growth.

Dynamics of the Russian Blue Chips from October 27 to November 28, 25.0% 10.0% -5.0% Change in price (%) In general within the period from November 1 to 28, 2006, the RTS index has grown by 5.11 per cent and reached 1728.98 points, which makes about 84.12 points in absolute terms. At the same period the turnover of sales on shares, included in the RTS index, made about USD 958.1 mln at the average daily turnover at the level of USD 50.43 mln (as compared with about $ 884.76 mln at the points mln US dollars s 01.09.19.09.05.10.21.10.09.11.25.11.13.12.29.12.24.01.09.02.28.02.17.03.04.04.20.04.10.05.26.05.14.06.30.06.18.07.03.08.21.08.06.09.22.09.10.10.26.10.14.11.Tatneft GMK LUKoil Rosneft Russia Gazprom NorNikel Russia RAO UES Mosenergo Rostelekom Sberbank of Gazprom Neft Surgutneftegas average daily turnover at the level of USD 42.1 mln in October). Therefore, the investors’ activity in the stock market in November has grown as compared with the preceding month. The indicators of maximum and minimum turnover in the market trades in November made USD 118.46 mln (as of November 27) and USD 28.6 mln (November 3), accordingly.

As of monthly results (from October 27 trough November 28) practically all “blue chips”, have shown a positive dynamics, excluding “Gazprom Neft” (downgraded by 1.08 per cent). Thus, the leading position in terms of growth took the shares of “Rostelecom” and RAO “AES Russia”, which values have grown by 23.9 per cent and 22.6 per cent accordingly. Much lower growth rates were noticed in regard to the shares of Sberbank of Russia (10.27 per cent), Nordnickel (4.47per cent), LUKOIL and Rosneft (4.26 per cent for both companies), Tatneft (4.06 per cent), as well as Surgutneft and Gazprom, which shares have grown in November by 3.87 per cent and 3.89 per cent accordingly.

Minimal growth rates were shown by Mosenergo shares, which have raised only by 1.35 per cent.

In November the RTS turnover leaders7 were: “RAO UES Russia” (16.3 per cent), “Gasprom” (7.per cent), “LUKOIL” (6.8 per cent). On the basis of weekly trading, the list of turnover leaders also includes “ Rosneft”, “Sberbank of Russia”, “Surgutneftegas” and “Norilsk Nickel” shares.

In terms of capitalization, as of November 28 the top five leaders of the domestic share market were8: “Gasprom” (USD 261.7 bln, “Rosneft” (USD 82.01 bln, “LUKOIL” ( USD 72.48 bln, “Surgutneftegas” (USD 47.5 bln), “Surgutneftegas” (USD 47.5 bln), “Sberbank of Russia” (USD 46.9 bln), “RAO UES Russia” (USD 37.7 bln) Futures and options market In November the investors’ activity on the RTS futures and options market (FORTS) slightly went down as compared with the preceding month. Thus, from November 1 trough 28 the total turnover on the RTS futures and options market amounted to approximately RUR 229.64 bln (462.56 thou. of transactions; 6.92 mln of contracts) against RUR 244.83 bln (493.4 thou of transactions; 695 mln of contracts) in October.

The greatest demand, as before, was for futures: the volume of trading in futures in the period under review was RUR 197.63 bln (447.9 thou of transactions, 5.84 mln of contracts). Options enjoyed a far lower demand, with the volume of trading at about RUR 32.01 bln (14.62 thou of transactions and 1.087 0f contracts). The highest amount of trading in the futures market was RUR 14.58 bln (as of November 1), the lowest was RUR 9.72 bln (as of November 24).

Corporate bond market In general corporate and municipal debt market in November was moderately negative. At the beginning of the month the growth was restrained by the state of the external debt market, while the USD rate stabilization and some enhancement of monetary liquidity in the bank sector were protecting the quotations from further downfall.

Further on the quotations continued to get down under the impact of lowering liquidity in the bank sector. Somewhat stronger USD position against RUR was the only factor that supported corporate and municipal bond market. Negative tendencies were getting stronger since the second part of October. A downgrading of the Russian Eurobond added to the sustainable yield growth factors of the first part of November (namely, problems with liquidity, high level of primary offers).

As a result, the price index of corporate bonds traded on MICEX9 fell by 0.23 points (0.2 per cent), while the index of the ten most liquid corporate bonds dropped by 0.27 points (0.23 per cent). In the period of November 1-24 the total turnover on the MICEX corporate bond section amounted to RUR 17.32 bln, with an average daily turnover of RUR 1.15 bln (about RUR 1.15 bln of an average daily turnover in October). Therefore, the average daily turnover in Russian companies' corporate bonds in November was taking place in the background of somewhat higher activity of the investors.

On the classical market.

According to RTS data.

The calculation was based on indices of corporate bonds traded on MICEX. The indices were produced by the Zenit bank.

220% Dow Jones Industrial Average NASDAQ Composite 200% Èíäåêñ ÐÒÑ 180% 160% 140% 120% 100% 80% RTS Index 01.09.19.09.05.10.21.10.09.11.25.11.14.12.10.01.26.01.13.02.02.03.21.03.06.04.24.04.12.05.30.05.16.06.04.07.20.07.07.08.23.08.08.09.26.09.12.10.30.10.16.11.01.09.19.09.05.10.21.10.08.11.24.11.12.12.28.12.16.01.01.02.17.02.06.03.22.03.07.04.25.04.10.05.26.05.13.06.29.06.17.07.02.08.18.08.05.09.21.09.09.10.25.10.10.11.28.11.External factors behind Russian stock market dynamics The volatility of oil quotations within November was quite high. If in the first half of the month the prices were rather stable and varied within a narrow range, the middle of the month has brought up a new downfall, which resulted in the reduction of the oil prices by about USD 5-6. The significant downfall of the market caused a decline in the majority of the financial market sectors. However, the forthcoming cold season in USA, worsening of weather conditions and OPEC comments on the possibility of further cutting down of official quotas have made for recovery of the oil quotations, which have overcome the level of USD 60 per barrel by the end of November.

The situation of the world stock markets in November remained quite favorable (see Table 1). The majority of the stock indicators of both, highly developed and developing countries within the month have grown, excluding a number of downgraded European markets.

The dynamics of the US bond market in November stayed within he frames of the rising trend of the few preceding months. Regardless the decrease of the basic indices under the impact of negative macroeconomic statistics on inflation and business activities, later on a growth of those indices was observed. The basic factors of growth were the victory of democrats at the election campaign, reduction of market deficit, a number of positive corporate events, as well as a rather positive inflation rate data, published at the beginning of the second part of the month, demonstrating a reduction of the inflation pressure over production and consumer sectors. Such sustainable growth at the end of the month was replaced with a diversified dynamics, provoked on the one hand, by technical factors and investors’ expectations of the new USA statistical data disclosure on the other hand.

Corporate news ÎÀÎ «Gasprom» On November 2 OAO “Gasprom” has placed the RUR shares, series A7 and A8 for the value of RUR 5 bln each, for the nominal cost of RUR 1000, with maturity term of three and five years respectively. The coupon rate of series A7, payable within 182 days as per results of MICEX, was estimated in the amount of 6.79 per cent per annum. The investors have made applications for RUR 9.6 bln. The coupon rate of series A8 payable within 182 days as per results of MICEX, was estimated in the amount of 7 per cent per annum. The investors have made applications for RUR 7.4 bln. The underwriters of those shares allocation are “Rennessans Capital” and OAO “Rosbank”, the co- underwriter is “Horizon” investment company, the financial consultant is OAO “Federal Bond Corporation”.

ÎÀÎ «Norilsk Nickel» On November 20, 2006 the company has denounced a signature of a purchase contract of OM Group Inc. business for USD 408 mln for monetary funds, excluding financial debts in monetary terms. The nickel business incorporates OMG plant for nickel depuration, a subdivision for nickel ore extraction and lixiviating, 20 per cent of MPI Nickel Pty. Ltd. shares (the company, which explores Black Swan è Silver Swan nickel deposits), as well as up to 11.1 per cent of ordinary shares and convertible debt liabilities in Talvivaaran Kaivososakeyhti (a Project on concentrated bio-lixiviating in Kainuu region, Finland).

This transaction will make for further extension of GMK «Norilsk Nickel» international activities and strengthening of its position in the international metallurgy and mining market. The Company will have an access to the advanced operational manufacturing instruments and the synergy potential of consolidated technological knowledge in hydrometallurgy and extraction, available in the existing business and in the newly purchased external resources.

«Norilsk Nickel» Group will extend its products range with nickel salts and brickets and expand its annual nickel production volume by nearly 35-40 thousand tons. Upon completion of the transaction GMK «Norilsk Nickel» will sign a contract on cobalt deliveries to OMG for a five-year term. The transaction, approved by the Boards of Directors of both companies, is subject to validation by the authorized bodies and is dependant on a number of finalization terms. The transaction is supposed to be performed in the first quarter of 2006. During the interim period GMK «Norilsk Nickel» will continue to provide services to the current cobalt consumers, work on the development of the newly acquired nickel business and consistent enterprise functioning. The Financial Consultant of GMK «Norilsk Nickel» in that transaction is UBS investment bank, the Legal Advisor is Hogan & Hartson LLP.

ÎÀÎ «Rostelecom» On November 2 the Company has published the non-audited report for the nine months of 2006 in compliance with the Russian accounting legislation (RAS). According to the presented reporting, the revenues of ÎÀÎ «Rostelecom» were raised within the nine months of 2006 by 47.0 per cent as compared with the relevant period of preceding year and made RUR 43 757.1 mln. The EBITDA indicator has lowered as compared with the relevant period of 2005 by 21.9 per cent and made RUR 9 069.mln. due to considerable growth of expenses, caused by the changes in the company system of settlements with the Russian operators. The EBITDA profitability ratio made 20.7 per cent. ÎÀÎ «Rostelecom» net profit as of the nine months’ results made RUR 5004.6 mln as compared with RUR 7 843.mln within the nine months of preceding year.

The banking sector ruble liquidity in November of the current year has shown a noticeable decline against October indicators: the average balance of credit agencies’ correspondent accounts in the Bank of Russia in November was about RUR 334.4 bln against October indicator of about RUR 366.6 bln.

Dynamics of the Dollar/Euro Exchange Rate on the International Markets 1.1.1.1.From November 1 to 28 Euro rate in the world market has grown by USD 0,04 (3.3 per cent) and reached the level of USD 1,3146 for EURO 1. In this background a considerable growth of EURO against RUR was observed in November. In the period from November 1 to 29, EURO has been raised by RUR 0.64. (1.89 per cent), namely from RUR 33.99 to RUR 34.63 for EURO 1. The total volume of trading in EURO on SELT in the period from November 1 to 24 amounted to only EURO 774,mln at an average daily turnover of EURO 45.53 mln (about EURO 420.6 mln at an average daily turnover of EURO 35.1 mln in October).